Woodside Petroleum (ASX:WDS) and Beach Energy (ASX:BPT) shares fell sharply on a day marked by broad selling in ASX energy stocks. The S&P/ASX 200 Energy (XEJ) index dropped more than 6%.
Woodside Petroleum shares fell as much as 7% to hit a day’s low of AU$29.55. Beach Energy shares declined as much as 9% to a day’s low of AU$1.44. Other big energy losers, included Karoon Energy (ASX:KAR) and Santos Limited (ASX:STO).
Strong U.S. dollar & dour global outlook hurt energy shares
The widespread selloff in ASX energy shares came as the U.S. dollar continued to strengthen. Oil and gas commodities are quoted in U.S. dollars. As a result, a stronger U.S. dollar can make crude oil more expensive for overseas buyers and hurt demand.
Woodside and Beach Energy shares also fell amid the worsening global economic outlook. The U.S. Federal Reserve Bank has shown that it’s willing to fight inflation even if it means triggering a recession. Recession concerns have started to impact fuel demand, with oil prices continuing to fall. Investors fearing that fuel demand will weaken in a recession have moved to cut exposure to oil stocks.
Woodside Petroleum share price prediction
According to TipRanks’ analyst rating consensus, Woodside Petroleum stock is a Moderate Buy based on six Buys and three Holds. The average Woodside Petroleum share price prediction of AU$35.76 implies over 18% upside potential. The stock has gained about 47% year-to-date.
Woodside Petroleum stock is receiving favourable mentions on financial blogs. TipRanks data shows that financial blogger opinions are 92% Bullish on WDS, compared to a sector average of 73%.
Beach Energy shares price target
According to TipRanks’ analyst rating consensus, Beach Energy stock is a Moderate Buy based on eight Buys, two Holds, and two Sells. The average Beach Energy share price forecast of AU$1.92 implies over 30% upside potential. The stock has gained more than 14% since the beginning of 2022.
Beach Energy scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
Concluding remarks
In uncertain economic times such as these, volatility in share prices can be expected. Woodside Petroleum and Beach Energy shares are still worth considering for a long-term portfolio despite recession worries as both look to have strong fundamentals.
